SEC Rocked By Lurid Sex-and-Corruption Lawsuit

In a salacious 77-page complaint that reads like Penthouse Forum meets The Insider meets the Keystone Kops, one David Weber, the former chief investigator for the SEC Inspector General's office, accuses the SEC of retaliating against Weber for coming forward as a whistleblower. According to this lawsuit, Weber was made a target of intramural intrigues at the agency (which has a history of such retaliation) after he came forward with concerns that his bosses may have been spending more time copulating than they were investigating the SEC.

Weber claims that in recent years, while the SEC Inspector General's office has been attempting to investigate the agency's seemingly-negligent responses in such matters as the Bernie Madoff case and the less-well-known (but nearly as disturbing) Stanford Financial Ponzi scandal, two of the IG office's senior officials – former Inspector General David Kotz and his successor, Noelle Maloney – were sleeping together.

The filing of this lawsuit now by Weber officially begins the raging clusterfuck portion of the story, as he and his lawyers are releasing lurid details not only about Kotz and Maloney, but about a host of other SEC and SEC IG officials. It's very strong stuff: the only things missing from this lawsuit are tales of SEC officials running white-slavery rings and snorting brown-brown off the corpses of strippers with West African rebels.

There are, for instance, allegations that officials handed out SEC contracts to buddies at influential Beltway consulting firms, claims that sexual harassment cases were covered up and accusations that the SEC failed to properly screen contractors who were given full access to SEC databases (it cites an example of one contractor who was on early parole from a 10-year narcotics bid in Virginia). The suit also alleges that the SEC security chief, William Fagan, "watched the video feed from security cameras outside of the suite, in order to determine the identities of . . . potential whistleblowers."